For most people, an estate plan is much more than simply a list of how they want their assets divided after they die. A comprehensive estate plan often includes tax and probate avoidance, incapacity planning, and retirement planning as well. In the end, your estate plan is a road map for the rest of your life and beyond. Because of its importance, be sure not to commit any of the common mistakes people make when estate planning, including:
- Mistakes relating to property ownership laws. Your home, for example, can be titled in a number of ways if you own it with another person. Exactly how you title it will determine what happens to it after you die. Titled the right way, it should pass directly to the co-owner. Titled incorrectly, it can be stuck in probate for months, even years.
- Not including a tax plan. Estate and gift taxes can eat away at your estate assets after your death if you fail to plan ahead.
- Not understanding probate. The probate process is the legal process often required after death. When an estate plan is drafted properly, much (if not all) of the probate process can be avoided.
- Doing it yourself. In today’s digital world, almost anything can be done without the assistance of a professional. That doesn’t mean that it SHOULD be done without professional assistance.
- Failing to update. The laws that govern wills, trusts, and estates are subject to change – and do change – frequently. Using out of date forms or not update your estate plan can cause your entire estate plan to fail when the time comes.
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